Pound Sterling Forecast: US-Iran Peace Hopes Leave GBP/USD Rangebound

Modified: Monday, 10 August 2026 21:01 BST - Written by Frank Davies

STORY LINK Pound Sterling Forecast: US-Iran Peace Hopes Leave GBP/USD Rangebound

The Pound US Dollar (GBP/USD) exchange rate struggled to establish a clear trend on Monday, as uncertainty surrounding developments in the Middle East kept the currency pair unsettled.

At the time of writing, GBP/USD was trading at $1.3498, with the pair fluctuating since the start of the week.

The US Dollar (USD) struggled for direction at the start of the week as uncertainty surrounding US-Iran peace negotiations kept markets on edge.

President Donald Trump said the US was ‘semi-negotiating’ with Iran, while Tehran has reportedly sought compensation from Washington for damage caused by the war. Iran is also in talks with Oman over a partial reopening of the Strait of Hormuz, although it has outlined six conditions that Washington must meet before an agreement can be reached.

Elsewhere, Yemen’s Houthi militia targeted a Saudi oil refinery, while a missile struck a UAE oil tanker in the Strait.

With tensions continuing to cloud the outlook, the safe-haven US Dollar moved unevenly as market sentiment shifted.

The Pound (GBP) likewise lacked a clear direction, with a quiet UK economic calendar leaving Sterling to take its cues from developments in the Middle East.

Although markets retained a cautious risk-on bias as hopes lingered for a peace agreement between the US and Iran, the more risk-sensitive Pound found little support from the improved sentiment.

Near-Term GBP/USD Forecast: Risk Appetite Could Set the Tone

Looking ahead, the Pound to US Dollar exchange rate could remain sensitive to shifts in global risk appetite on Tuesday, with neither the UK nor US economic calendars offering much in the way of market-moving data.

Attention is therefore likely to remain fixed on developments in the Middle East. Evidence of progress towards a US-Iran agreement could lift risk appetite and reduce demand for the safe-haven US Dollar.

However, a fresh escalation in tensions could have the opposite effect, encouraging risk aversion and putting pressure on GBP/USD.

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TAGS: Pound Dollar Forecasts